little cab vs uber

Why safaricom might struggle in the taxi business if focus is on price.

Safaricom-backing online taxi-hailing app Little Cab has sparked off a price war with rivals Uber and Mondo Ride by setting lower tariffs compared to its two global competitors. Little Cab, developed by local IT firm Craft Silicon, is charging passengers Sh55 per kilometre and Sh4 per minute – with no flat base charge or price surges during peak hours or heavy traffic jams.

Nairobi metropolis is estimated to have more than 10,000 taxis each doing an average of four trips daily, according to official data, valuing the capital city’s taxi business at Sh20 million a day.

The taxi business has become like the agency business where agents have multiple devices from mobile network operator and Banks. Taxi drivers are on all platforms, so to them what matters is which platform the customer contacts them from and how fast they can get their commissions.

Little cab has little outlook. Uber focus is not on customers parse, but in the number of drivers. You might have the lowest fares in town, but without cabs you will be edged out by Uber as they have the drivers all over and since they charge more (Ksh 60) this means driver’s welfare is better in Uber. Thus, little cab cannot win by waging a price war.

Now in simple terms, using Littlecab and I am in JKIA a 20 KM from city center, how much do I pay to reach the City center GPO if it takes 30 Minutes = (20*55) + (30*4) =1220, Uber charges in Kenya are priced at Sh60 for every kilometre covered and Sh4 per minute in addition to a base fare of Sh100, (20*60) + (30*4) +100=1420.

City Hopper charges 100 Max, I will take a bus ultimately it’s the consumer who will benefit so bring it on! Will the local taxi owners also be up in arms against this technology? I wonder.

Competition is good, however it’s a race to the bottom with pricing and efficiency. With Little cab having no limits on age of the car they are off to a bad start as who want to ride on a shock absorber free jalopy. However, their Ladies only cab should be a winner.

 

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